“Our target of minimum 10% (net profit) growth in 2008 is more than realistic,” Chairman and CEO Sándor Csányi told an investor conference. Csányi added that for the time being, the bank’s 2010 target of €2 billion in pre-tax profit also remained in place but OTP would review it when there is more clarity about the global financial turbulence. “This is a very difficult environment,” Csányi said. “In order to reach the €2 billion (pre-tax profit) in 2010, we need to use our financial resources very smart.” “So far there is no plan to modify our midterm targets. The earliest we may (review it) is at the end of 2008,” Csányi said.

Speaking on the sidelines of the conference, Chief Financial Officer László Urbán said the current turbulence on the world financial markets makes it difficult to predict 2010 earnings.

OTP, which has market capitalization of $10 billion, added that funds for expansion have grown more expensive and less available, which require a modification of its business strategy and the divestment of some units — its Serbian and Slovakian banks are already up for sale — and it may also consider other divestments. But OTP may continue to acquire banks in the east, particularly in the more lucrative markets of the former Soviet Union, although it plans no large acquisitions, the bank said in a presentation to be delivered by Csányi and Urbán.

OTP has been in talks to make an acquisition in Azerbaijan and Csányi said negotiations there are not likely to conclude before October. In the H1 of 2008, OTP’s net profit rose by 28% to Ft 129.6 billion ($760.8 million), in excess of expectations and analysts said its full-year net profit growth will be well above 10% from Ft 208.21 billion net profit in 2007.

OTP said that as part of the strategy shift, it will place greater emphasis on its Bulgarian, Ukrainian, Russian and Montenegrin subsidiaries while in Hungary, it will seek to shift its business to high margin retail areas from low margin corporate business.

 
GROUPAMA

OTP Bank late on Wednesday said it closed the sale of its Hungarian insurance unit to France’s Groupama. OTP Bank units OTP Holding and Merkantil Bank transferred 100% of the bank’s insurance company OTP Garancia to Groupama International.

OTP Bank announced in February it agreed to sell 100% of OTP Garancia along with its subsidiaries in Romania, Bulgaria and Slovakia to Groupama for a total consideration of Ft 164 billion. Groupama also agreed to enter into a long-term partnership with OTP Bank on cross sales in all nine countries in which OTP Bank operates. In August, OTP Bank closed the sale of its Bulgarian and Romanian insurance units to Groupama. Earlier in September it closed the sale of its Slovakian insurance unit to Groupama. (Reuters, MTI-Econews)